Writers Guilds to Renegotiate Talent Agency Agreement

1:26 PM PDT 4/6/2018
by
Rebecca Sun
,
Jonathan Handel

Courtesy of WGA West

The dispute is over agencies making money via packaging, producing or financing content.

The governing boards of the Writers Guild of America on both coasts have voted unanimously to reopen their 42-year-old agreement with the Association of Talent Agents, The Hollywood Reporter has learned.

The move, announced Friday in an email to members of the WGA West and WGA East, was expected, as over the past several months guild leadership has been meeting with its members to hear their concerns over talent agencies increasingly moving into producing, financing and owning content. Also a concern: the longstanding practice of packaging television series and taking a packaging fee rather than a 10 percent commission.

In a statement, ATA executive director Karen Stuart acknowledged receiving the WGA letter, and added, "It’s unfortunate that the WGA has taken this step without ever having reached out to ATA to discuss any of the issues it sets forth in its proposals. That said, the ATA will do what it’s always done: constructively engage in a dialogue with the Guild to consider any legitimate concerns."

The scope of the agency business was quite different back in 1976, when the current Artists' Manager Basic Agreement was struck, and the guild says that agencies like WME, which combined its finance and sales groups to form Endeavor Content in October, are now dealing in conflicts of interest.

Producing, financing and owning content gives an agency dual and conflicting roles, says the WGA, since the agency becomes both a talent rep and a talent employer. Meanwhile, earning money via packaging fees makes agencies inattentive to maximizing writers' compensation, says the guild, because the agent isn't commissioning the compensation but is instead paid a percentage of the show's license fee (which is related to the overall budget) plus a percentage of profits.

Agencies disagree. They say that talent is generally happy that the agency itself (or an affiliate) is now an additional buyer in the marketplace, and that if an outside deal is better, that's where the project goes. As for packaging, an agency insider told The Hollywood Reporter that their agency had received no complaints from clients and that if the agency were not attentive to writers' compensation, clients would simply walk out the door and find an agent who was.

Indeed, clients can choose agencies that don't package. Although about 90 percent of scripted series are packaged, according to WGA figures for the 2016-17 season, 80 percent of packaged series involved WME or CAA. In contrast, UTA does roughly half the packaging that either of the top two agencies do, while ICM and Paradigm have fewer packages, and APA and Gersh almost no packaging at all.

(One curiosity about the WGA figures: The guild says that over 300 series were packaged, but that's around 65 percent — not 90 percent — of the total number of scripted series in 2016 or 2017 as measured by FX data.)

The guilds have sent the ATA proposals that address their members' concerns, along with an April 6 notice to terminate the current agreement in 12 months if agreement on revisions cannot be satisfactorily reached before then. This ticking-clock procedure is what is prescribed in the agreement if either party wishes to renegotiate.